Jersey Funds Sector Brimming With Activity

By Editorial 03 March, 2014

A rise in high value real estate and private equity funds targeting the United Kingdom, continental European, and global assets have been structured through Jersey in recent months, providing evidence of Jersey's growing appeal as an alternative investment funds domicile, says Jersey Finance – the promotional agency for the island's financial services industry.

In the last six months, a number of major and innovative real estate and private equity fund structures have been reported by Jersey law firms, involving a combination of European and non-European assets and investors.

The Jersey office of offshore legal service provider Appleby advised on two major landmark UK property transactions with a combined value of GBP2.5bn (USD4.18bn). It acted on behalf of Blackstone on the sale of its interest in a joint venture with British Land PLC, which owns the Broadgate Estate, to Singaporean sovereign wealth fund 'GIC' – one of the largest real estate transactions in UK history. Appleby also advised Blackstone on the sale of its beneficial interest in the Chiswick Park Estate to the China Investment Corporation (CIC), and continues to undertake the administration of these structures.

Carey Olsen advised Nordic private equity firm FSN Capital Partners on its latest fund FSN Capital IV, which closed with GBP500m of commitments, primarily focused on mid-market Nordic companies. 35 percent of the total capital raised for the fund came from limited partnerships in Nordic countries, 30 percent from Europe excluding the Nordic region, 21 percent from North America, and 14 percent from Asia.

Mourant Ozannes advised on the Jersey legal aspects of the establishment and first closing of Northzone VII, a venture capital fund investing in early-stage and expansion-phase European technology companies with Nordic roots. The fund was structured as a Jersey limited partnership and authorized by the Jersey Financial Services Commission to be marketed within the European Economic Area by private placement in accordance with the Alternative Investment Fund Managers Directive (AIFMD), and is targeting to raise up to GBP200m through Nordic and international institutional investors.

Jersey's role as a center for both EU and non-EU real estate and private equity fund structuring will be one of the topics to come under the spotlight at Jersey Finance's annual Funds Conference in London this year. The conference on March 19, 2014, will include a panel session discussing the increasing appeal of Jersey private investment vehicles, and why sophisticated investors are making more use of Jersey structures for global real estate, private equity, and infrastructure investments.

Geoff Cook, CEO, Jersey Finance, said: "As the end of the transitional period for AIFMD implementation draws near, it is extremely encouraging that we are seeing not just sustained use of Jersey structures across real estate and private equity asset classes, but that the funds being structured through Jersey are amongst some of the most ground-breaking transactions completed in recent times."

"These recent examples involve both European assets and non-European investors, which reflects Jersey's flexibility and provides evidence that Jersey's approach to the AIFMD – in being the first third country to offer the option of a fully-compliant AIFMD regime, whilst at the same time offering a regime for non-EU funds that fall outside the scope of the AIFMD – is proving very attractive to UK, EU, and non-EU managers. In fact, recent feedback we have received from UK private equity and real estate legal advisers indicates that they would be very or extremely likely to use Jersey for offshore fund structuring."

"These are not isolated cases, but build on examples we saw last year too and we fully expect this trend to continue. Jersey is the leading real estate fund domicile in Europe and with the UK Treasury confirming its national private placement regime will definitely be in place until 2018, Jersey will continue to enjoy easy access to the UK investor market. Equally, we anticipate an increase in the number of Jersey real estate and private equity funds targeting assets in growth markets in Europe, Russia, Africa, and Asia this year."

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